What I Had Hoped
Though you never would believe such a thing is possible, I treaded lightly when I wrote my post spoofing the never-ending debate over real estate commissions by comparing those commissions to the tip we pay our server when we go out to eat. What I had hoped was to spur one and only one thought – “who the hell cares what a server makes? It’s none of our business, right?”
In that respect, I believe the post for all of its brilliant wit failed.
Maybe I’m being a bit too hard on the poor little post. Maybe stopping or even slowing the debate over what real estate agents make is like trying to stop a speeding train with an elk. The elk will cause a little damage but at the end of the day the train’s going to keep rolling on.
This Time It’s Personal
I’m stealing dear Poppy’s headline but I’m certain I’ll be forgiven. The debate over real estate commissions and how they’re paid and whether they are fair and whether there will be or must be a change is personal for me, not because I particularly care what your opinion of how I conduct business might be but because there are people who feel it’s open season for debate in the first place.
Your theories are my 1099s. If you are a client (or prospective client) and you don’t agree with what I charge in my business, don’t hire me. Just like if you don’t like the product or prices in a store or a restaurant, you have the right to shop elsewhere in the mall. If you’re not a prospective client, you’re not going to pay me a cent anyway so why the hell do you care if someone else is willing to do so?
Let’s Talk About Your Salary
If you feel real estate commissions are fair game for discussion, that’s fine. But let’s be fair. Please comment below with your job description and current salary. I then will find an appropriate message board and we’ll start to discuss whether the public should have to pay your salary for the benefits we as a group recieve. If you’re not public-facing, no matter. I’ll find a way to tie it to a public product where the cost of your salary is included in the price of whatever the product happens to be.
Ludicrous? Why? Shouldn’t everyone’s 1099 and W-2 be open to public scrutiny? Is a real estate agent really so much more of a public figure that there’s a different standard for us than for anyone else who earns a paycheck and isn’t in same way receiving funding from the tax base as a whole.
Put another way, unless you’re the one hiring me you’re not paying me a cent. So mind your business.
Bluffing With Bull … er, Rhetoric
Of course, to some out there the debate is their entire reason for existence. It took a little longer than I had expected but any commission debate almost always will lead to comments from the agents who charge a flat rate that theirs is the only viable business model.
If such a model works for you, go for it. Just don’t tell me that I have to change or else I’ll be out of this business. Because that’s simply not true.
A couple of years ago, a high profile agent here in Phoenix (who even sells a home once in a while) enacted a rebate/flat rate model for buyers. I predicted that there wasn’t sufficient interest among the buyers’ set for the model to gain any traction. Shockingly, I was correct. (Still waiting for that admission to come.)
There are consumers looking for the best bargain just as there are consumers who will pay a little more if they perceive they’re receiving additional value. It’s a basic fact. Morton’s remains in business and so does McDonald’s. Different tastes for different budgets.
But you never see McDonald’s telling Morton’s that they have to drop their prices or else. Somewhere down the line, it was realized that the best way to market yourself is to market what it is you do, not what is wrong with someone else. You can be the product of choice or the lesser of two evils. That choice is yours.
Hit Me With Another Analogy, Baby
Once upon a time, all stockbrokers worked on commission. Back in the 1970s rules were changed and along came Charles Schwab, who introducted the concept of “discount brokerage.” Schwab since has gotten away from the idea of “discount” because, predictably (not but not then when there was no Internet), others entered the market who could do the same thing for less.
Fast forward to 2008 and guess what? The so-called traditional stock brokers still are working on some sort of commission model, just as they always have. And there also are a number of places where you can trade your stocks for a flat rate so easily that even a creepy talking infant can do it.
There’s room in the marketplace for both. There’s a different client set for both. And both still flourish.
So What’s the Real Issue?
You mean, other than the fact that I’m tired of the idea that my tax return is open for public debate?
It’s just this – that the real issue here, what commissions the public “should” pay, is nothing more than a false argument brought to life through the Internet. Whether a question makes any sense is irrelevant in a day when anyone with a computer camera can be an “iReporter” for CNN (as opposed to just being some guy or girl with a camera.)
The question of whether real estate commissions have to come down is a non-question. What happens in my market is different than what happens from yours, and both are different than what happens in Canada.
As long as there are buyers and sellers for both flat rate and percentage models, both models will continue to co-exist … almost as peacefully as the strident hard-liners who identify more with red states and blue states than the United States.
No elk were harmed in the writing of this post